Tuesday, May 20, 2014

Mobile money has become a buzz word since the success of M-PESA in Kenya. But whilst the topic is hot among development and poverty reduction workers; it has so far not gathered enough attention from academics. A simple review of literature in the area of mobile money reveals that there are many articles that associate mobile money with development, poverty reduction, security issues, adoption issues, acceptance and use by customers. But, there are no adequate pieces of work that relate to the issue of system design.

As a researcher I tried to unpack what cash money really is. I am an information systems expert and my analysis of mobile money is primarily pragmatic and depends on my readings across different domains, particularly sociology and money, anthropology and money, behavioural economics and money. I get knowledge and information from these domains and combined with my own areas of expertise I am able to reflect on what mobile money or digital money should look like and the nature or elements of the kind of system that can handle mobile money. Here are my reflections:

First what is money and how it is changing? Even though there are different categories of money from social and anthropological points of view, in this writing I am interested in looking at cash as money and thinking about how its changed forms affect system design. To me cash money is simply information with some specified metadata, like color, image or icons, numbers, and some other hidden security controlling means (see the figure below). People agree to accept this information as money because they know they can give it to others without concern. What makes this piece of paper (cash money) and or coins is the information (metadata inscribed on them).

Ethiopian currency.

Metadata

This is to say that if we remove these metadata, the remaining piece of paper cannot be considered as money. And thus, these metadata are making money valuable and make people develop trust and confidence. But with the digitization of money, in its current state of research and development, these metadata are excluded from existing platforms and solutions. In the current platforms or solutions, money is represented as a simple positive rational number of the form say 2.89 USD, 0.89 USD, 247 USD etc, excluding the metadata as well as the different money denominations. For example, in Ethiopia our currencies are denominated as (5 cent, 10 cent, 25 cents, 50 cents, 1 birr, 5 birr, 10 birr, 50 birr, and 100 birr notes). This indicates that we cannot pay (get paid) for example exactly 12 cents, 11 cents, 9 cents, 9.87 etc. However, we know that with the digitization of money, it is possible to accommodate any amounts and thus, unlike in the case of cash based transactions, in digital transactions making changes is not an issue. That is the bonus of current computing and mobile money technologies. But such money representation with positive rational numbers and removal of money’s metadata elements faces challenges when it comes to people that are illiterate. For example, illiterate users know their balance by counting the material money. They do not know what numbers 20, 40, 12 etc mean. Rather, they know these figures when they are physically handed them and able to count them by hand. The following paragraphs outline some of the design implications of my ethnographic research I did in 2012 in Ethiopia among open air market participants.

Purposes of money’s metadata:

•Images or icons: The icons or images on money bills have different purposes like: as national identity (collective national values). For example, Ethiopian money bills have pictures of coffee plants, farmers, a map of Ethiopia, historical buildings, the signature of the governor, and a tractor machine. Some countries also inscribe photos of elite individuals and their sacrifice for the nation, for example photos on USD. In Ethiopia, the icons and images inscribed on money bills enable illiterate users to identify money bills.

•Security tools: These are features inscribed on money bills to identify real money from forgery. The problem with these tools is that, when the bills get old, these features usually fade away and may not be visible, which makes differentiating forgery from valid money bills difficult.

•Serial numbers: These have also a very important role. When all or parts of these numbers are lost (faded away), individuals do not accept. Such money bills have to be taken to banks for replacement, as per the respondents from my field study. Otherwise, they become worthless, as people, particularly illiterate users will not accept for change during transaction.

•National identifier: This is written in both English and Amharic and identifies the legal issuer (governor).

•Color: All Ethiopian money bills are color coded, which enable illiterate users to identify different bills. Color and images on money bills are used for counting and computational purposes. For example, illiterate individuals know the sum of 10 birr and 5 birr will give 15 birr and yet do not know how to spell these numbers. When they are also asked to pickup money bills of say 50 birr from a lump sum of bills with different denominations, they easily identify them through their color. Thus, it could be said that color of money bills is a means to identify them.

•Economic value: These are numbers written in terms of roman numbers as 1 birr, 5 birr, 10 birr, 50 birr, and 100 birr as well as Ethiopian numbering systems and the Amharic language. Birr has denominations of 1, 5, 10, 50, and 100.

Characteristic features of Ethiopian money bills of five and ten birr.

The material nature of money bills also has an added value for illiterate and visually impaired people. Illiterate people make some simple mathematical computations (additions, subtractions, multiplication, and divisions) by moving money bills here and there as they cannot accomplish these through writing numbers on paper or calculating machines. For example, in order to make payment or receive payments people count money bills and in order to count them, people usually sort and arrange them according to the denominations (from smallest money bills to the largest) and then hold the stack in one hand and count with the other hand. In this context digitization can make illiterate people frustrated, unless there are solutions for this issue.

One thing we learned is that current mobile money platforms and solutions did not consider these metadata in their design. My reflections and proposed solution for this problem will be presented in two forthcoming papers to be shared on the IMTFI Blog once they are published.

Money organization

From my open air market study I have also observed and understood that illiterate merchants and customers distribute their money among different bags or pockets. They also give different labels or names like bag for sales from coffee, sales from salt, and sales from other materials. When they need a change, they try to look into the respective bag. In fact if there are no changes in the necessary bag, they take from another bag and return the money later. It is kind of a “loan” from the other bag. I call this “distributed cognition”. They remember from which bag they took change and want to replace the amount they took. Thus, it appears that from a technology design perspective, designers need to be aware of such cognitions and practices and its implication for design.

Problems with cash

I also observed that even though the material property of cash helped illiterate people count and know their balance as well as the difference between different currency notes, (based on its color), it has some limitations. It can get old and stick together, part of it can be torn and people are not willing to accept for change, some individuals also make forgery money and easily cheat illiterate rural people. It also creates difficulty for making changes, if there are no changes. But, with the upcoming mobile or digital money systems, even though it appears that the issues of forgery, sticking together, and changes can be addressed, the issues of operationalizing technologies for these issues can not be an easy task. Addressing one of the issues will come at the expense of another.

Final thoughts

Finally, based on the nature of money digitization and money handling experiences of illiterate people in developing counties, I feel that new technologies need to have capability like audio in order to embed money’s metadata, and enable individuals’ to experience “physicality within digital environment”. I also recommend interested readers to consult the work of (Balen et al 2009) for more reflections about money digitisations as related to ease of usability, security, and auditing. In this case I want to make a note that the work of Balan et al. (2009), focuses on literate people while my reflection is in the context of illiterate people who have different money practices.

Dr. Bill Maurer, Director of the Institute for Money, Technology, and Financial Inclusion at UC Irvine, talks about his work on mobile currencies in developing countries in Africa and how Bitcoin can allow people in those countries to transfer money without access to traditional banking institutions.

Monday, May 5, 2014

In the study on mobile money and gender empowerment in Eastern Kenya, Prof. Simiyu Wandibba, Dr. Stevie Nangendo and Dr. Benson Mulemi examined the consequences of mobile financial services for financial inclusion and socio-economic development. The study revealed that attempts to offer access to mobile payment services in Machakos County provoked gender empowerment ambiguity among, rural and peri-urban users. Mobile payments empower men and women economically but also cause issues in gender roles and relations. Marginalized poor people, particularly women, have been empowered economically by mobile financial services, but this could threaten harmonious gender relations on which sustainable socio-economic development can be built. In fact, the study confirms the findings of other ethnographies which indicate that financial inclusion initiatives in East Africa today do not benefit men and women equally. While initiatives for financial inclusion for economic livelihood are imperative in Kenya and the rest of East Africa, product developers need to promote gender sensitive financial services drawing on available ethnographic studies. Available ethnographies indicate that social and cultural factors may hinder individual men and women’s realization of financial inclusion, socio-economic empowerment and overall societal well being that depend on indigenous mutual trust in gender relations and kinship as well as general gender roles.

Photo by Victoria Muinde

The local livelihood in the study area derives from subsistence agriculture and small-scale businesses in numerous open air markets on designated market days. More women than men run the small-scale businesses and receive support from their men kin who work in the neighbouring Nairobi City County and other urban areas in Kenya. Numerous non-governmental organizations support women-in-development and gender-and-development initiatives in the Eastern County; this provides strong foundation for mobile financial services. As expected, the mobile money transfer (MMT) and mobile financial services (MFS) in Machakos County tend to benefit women more than men, hence the services have contributed to overall economic empowerment of the local women.

Those who use MMT services in the study area gain comparative advantages in micro-entrepreneurship, domestic maintenance, and payment of school fees and various domestic bills. MMTs increase accessibility to money and financial services and the growth of different businesses by allowing money to circulate more easily.

Photo by Victoria Muinde

While the study found no significant differences between men and women with regard to the use of mobile phones to receive money, the results indicate that women made more withdrawals than men. On the contrary, men were more likely to participate in m-banking, as more men than women said that they owned mobile telephone handsets and had some financial saving literacy. Ownership of telephone handsets determined the use of mobile money transfer and m-banking subscription. Inconveniences such as a lack of identification documents would affect the registration and subscription of both men and women differently. More women than men said that they received money through the mobile money transfer facilities for small-scale business and family maintenance. Owing to the demographic structure in rural and peri-urban divisions in the study area, women are more likely to receive money via MMT than married men, sons, married daughters and other relatives who live away from home. Therefore, more women in the study area accessed more money and controlled their financial resources more than they used to before the introduction of MMT services. This study confirms that MMT and MFS boost women’s participation in household livelihood needs. However, the ethnographic results indicate that MMT and mobile telephone services may not contribute to sustainable financial inclusion and saving practices, contrary to what many people know and the emerging popularization of MMT and MFS in this regard. Spending and transfer of money via MMT platforms facilitates social investment rather than saving for sustainable financial inclusion.

MMT services should consider programmes that can balance financial and social benefits of the mobile financial inclusion technology. Overall, MMT services contribute to the economy of affection by strengthening kin and non-kin social bonds and relations, especially through reciprocation of material and non-material support. However, the study participants' ambiguous relation with MMT and MFS proved that they could strain gender relations and cause high rates of abandonment of gender responsibilities.

Click here to see the full report on Gender Empowerment in Eastern Kenya.